ACCC culls Telstra exchange exemptions

Summary:The Australian Competition and Consumer Commission (ACCC) has reinstated the regulation of over 200 Telstra exchanges, stating that Telstra was found to have charged higher prices at these exchanges.

The Australian Competition and Consumer Commission (ACCC) has reinstated the regulation of over 200 Telstra exchanges, stating that Telstra was found to have charged higher prices at these exchanges.

In August 2008, the ACCC decided that 248 Telstra exchanges could be exempt from regulation, as long as the exchange service areas (ESA) had three or more unconditioned local-loop service (ULLS)-based competitors providing services to 14,000 or more customers.

Following a review that commenced earlier this year, the ACCC today announced that it has decided to remove these exemptions, as Telstra had been overcharging its retail rivals in those areas.

"Telstra is currently exercising its market power to charge [wholesale line rental] prices that are significantly above supply cost in the exempt areas," ACCC chair Rod Sims said in a statement. "There is a strong case for removing the exemptions."

Exchanges in the CBD areas will remain exempt, however; the ACCC is allowing Telstra to set its own price and conditions in those locations.

The ACCC has also released two discussion papers today for comment; one on Telstra's structural-separation undertaking (SSU), and one on whether to hold an inquiry on the necessity of regulating wholesale ADSL prices.

Telstra released a revised SSU last Friday, which governs how Telstra will behave as it separates its wholesale operations from its retail operations in the interest of equivalence of access to its services.

The ACCC said that it could see no reason why it should not approve the undertaking, as long as the issues with wholesale ADSL pricing could be worked out. However, the Competitive Carriers Coalition said last week that it would still need to decide whether the undertaking was good enough.

The ACCC needs to give the undertaking a tick before the $11 billion deal between Telstra and NBN Co, which will see NBN Co make use of Telstra ducts and will see Telstra customers migrated onto the new national networks, can be completed.

"The ACCC has continued to monitor the state of competition, and it has become clear that there are a range of competition concerns around the supply of wholesale DSL services," Sims said in a statement.

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t...
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